Public & Private

The move towards greater flexibility for the best-performing councils after last week's comprehensive performance assessment results suggests that we may be ushering in a new era in relations between central and local government. Certainly, central government seems set on focusing more on dealing with failing local authorities than successful ones.

As housing represents such a small proportion of the CPA scores assessed so far, it is difficult to be precise at this stage about the effect that may have on those local authorities' housing services. Nevertheless, there is a clear indication that the better-performing authorities could be rewarded in future, if only by a reduction in the number of inspections they undergo. In particular the government has already indicated that authorities with "fit for purpose" business plans will not be required to submit the "future plans" return until such time as the plans change.

It will be more difficult to assess how this could translate into more local housing resources, given the single pot arrangements. Once again this year, a proportion of housing investment programme resources has been tied to performance, but simultaneously the government has been putting a substantial amount of emphasis into rewarding high performers if they are prepared to pursue the arm's-length management route.

Understandably perhaps, some high-performing housing authorities have argued that they should be given the extra resources without having to set up arm's-length management organisations – especially if other services provided by that same council have not been up to the same high level of performance. This is a difficult conundrum and no doubt it is testing policy makers on the eve of the government's Communities Plan announcements.

The allocation of resources to ALMOs could come under a lot more scrutiny in the next round if, as expected, it is over-subscribed.

The Audit Commission's housing inspectorate ratings are key to securing the extra money, but the amount actually allocated will still be linked in some aspects to investment need.

Central government now seems set on focusing more on dealing with failing local authorities than successful ones

In bidding for the extra resources it seems likely that authorities will have to look carefully at the amount required to achieve the decent homes standard and to achieve their other investment requirements.

There remains a level of subjectivity and inconsistency in the approach taken by local authorities that will make the government's job trickier when deciding how to allocate these resources. The extent to which the authority has been prepared to find money from its housing budget or its own, non-ringfenced, resources could also be an issue.

The average initial allocation in the first two ALMO rounds amounted to around £2000 a unit with the possibility of more to come. For some authorities this will be a substantial bonus, but whether it will be enough to justify the ALMO route could be a tough decision when compared with the other options.

The extra cash now would not necessarily preclude future allocations but it depends how future rounds are determined.